Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, to compute the corresponding premiums, and thereby to reduce asymmetric information. Permitting risk classification may reduce informational asymmetry-induced...

Countries that seek to provide universal health coverage deal with considerable publicly funded expenses. This article discusses if a private health insurance subsidy policy can reduce the expenses covered by the public system. A theoretical model is developed in which individuals are...

Azevedo and Gottlieb [2017] (AG) define a notion of equilibrium that always exists in the Rothschild and Stiglitz [1976] (RS) model of competitive insurance markets, provided costs are bounded. However, equilibrium predictions are sensitive to assumptions made about the upper bound of cost:...

We present and empirically implement an equilibrium labor market search model where risk averse workers facing medical expenditure shocks are matched with firms making health insurance coverage decisions. Our model delivers a rich set of predictions that can account for a wide variety of...

We present and empirically implement an equilibrium labor market search model where risk averse workers facing medical expenditure shocks are matched with firms making health insurance coverage decisions. Our model delivers a rich set of predictions that can account for a wide variety of...

This paper characterizes the optimal information structure in insurance markets in the presence of adverse selection. The optimal information structure minimizes ex-post risk subject to a participation constraint for insurees and a break-even constraint from insurers. In the unique optimal...

This paper deals with the idea of converting retirement benefit into a life care annuity with graded benefits using a pre-existing public pay-as-you-go pension scheme. Based on accurate biometric data from Australia and the US, the paper shows that using gender-neutral annuity factors to compute...

Here, we argue that the commercial for-profit insurance companies act more like a memory-less system in a way that the premiums paid by the policy holders during one accounting period will be of no avail to them during subsequent periods although the excess premiums earned in the previous...

This research uses the input-oriented Data Envelopment Analysis (DEA) approach to examine the efficiency of the U.S. health insurers. It shows that more insurers are less efficient than the previous sample year; however, the results suggest that the federal health care reform have no significant...

International courts often apply the social justice standard of Aristotelian equality - treating like people alike and unlike people differently - to cases involving insurance pricing discrimination. This article examines whether the use of insurance pricing variables like gender and race...